Cronyism
in Asia: A PrimerTo
fight cronyism, it pays to know the factors that feed the habit, which
would give clues on how to combat it. One big problem is defining exactly
what cronyism is. There is nothing illegal or harmful about most cozy
deals, but picking out and punishing the bad ones is the constant challenge.
Unfair practices are widespread and entrenched. Centuries of feudalism
are a key factor; others are government intervention in the economy
and weak institutions. There are also country-specific factors:

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 Reformers: Crusaders
wage war against corruption

China

Malaysia

The communist system grants authorities vast powers to meddle in
business and to muzzle exposEs. This autocracy, along with rapid
liberalization and economic growth, has multiplied the opportunities
and rewards of cronyism. The breakdown of moral values and the glorification
of wealth, epitomized by Deng Xiaoping's dictum, "To get rich is
glorious," has further spurred corruption.

Created
to help indigenous races, the New Economic Policy affords ample
ways to favor businesses through state contracts, funding, privatization
deals and share allocations. The dominant UMNO party used to control
vast commercial interests; some major ones are now under listed
Renong.

Hong
Kong

Pakistan

Since
the Opium Wars, big business has influenced government, with top
business people in the Executive Council and functional constituencies
in the Legislative Council. Government control of land supply and
regulation of services leads affected companies to lobby officials.

Landowners
and industrialists have long dominated Parliament and have had close
ties with the past governments of both jailed former premier Nawaz
Sharif and exiled ex-premier Benazir Bhutto. There is heavy state
involvement in the economy and banking. The military's tremendous
power has increased since last year's coup by Gen. Pervez Musharraf.

India

Philippines

Economic reforms have reduced the state's role in the economy, but
there are still plenty of opportunities for influence-peddling and
special deals. Privatization has enriched crony interests. Campaign
spending for the world's largest elections also builds links between
politicians and business.

Since
self-rule in 1946, a political-spoils system has allowed well-connected
interests to rise with every new administration. In the 31-year-rule
of Ferdinand Marcos, ousted in 1986, cronies controlled key sectors,
including the sugar and coconut industries and media, and got state
loans, lucrative contracts and concessions.

Indonesia

South
Korea

Decades
of opaque politics and close ties between the previous Suharto regime
and big businessmen have further entrenched a tradition of buying
top-level influence. State dominance in banking has led firms to
lobby for loans and over debt restructuring.

Cozy
business practices. Until President Kim Dae Jung took power in December
1997, there had been close ties between past governments and the
giant conglomerates, or chaebol. When democracy came in 1988, these
business groups provided campaign funds. Feudal ways like offering
gifts for favors is widespread and starts early; even parents do
it for their kids' teachers.

Japan

Taiwan

State-supported
industrialization. Business obtains influence by funding patronage
spending by politicians. Government-business links are mainly between
political parties or government agencies and industry groups. In
a practice called "descent from heaven," firms and banks gain influence
by hiring top bureaucrats when they retire.

"Black
gold" politics. The Kuomintang, ruling party from 1949 until this
year, has vast business interests. Another issue is corruption in
infrastructure projects. There are links between politicians and
criminal elements, some of whom have won seats in Parliament. Elections
have created the need for campaign funding.

Thailand

Election
overspending. Thai politicians depend heavily on business support.
Patronage politics, particularly in the countryside, boosts both
political spending and the cronyism mentality of asking favors from
the powerful. The prostitution and drugs trade has corrupted many
officials and police.